The UK’s Competition and Markets Authority (the “CMA”) published its proposed “Annual Plan 2018 to 2019” for public consultation last month. Respondents have until January 14 2018, to respond as to whether they agree with the overall direction of the proposed Annual Plan, whether they believe there is anything more that the CMA should be doing or whether there is anything that the CMA should de-prioritise in 2018/19.
We note below some interesting take-away points from the proposed Annual Plan.
Technology: Technology features prominently throughout the proposed Annual Plan.
The CMA announces that it will enhance its understanding of the digital economy, by establishing a new digital, data and technology team. This will seek to improve the CMA’s own use of large data sets when it comes to analysing competition cases, and in addition ensure the CMA has a sufficient understanding of the key issues affecting the technology sector. Another way of improving the regulator’s understanding of the digital economy will be to explore ways to simulate certain aspects of the online environment in order to design, test and implement solutions which will reliably address concerns identified.
In relation to fast-moving markets, such as those in the technology sector, it is recognised that anti-competitive practices can so weaken a competitor that the harm to competition occurs before it is possible for the regulator to reach an infringement decision. The CMA is therefore keen to use interim measures to address such concerns where appropriate, instead of (or ahead of) reaching an infringement decision.
Additionally, the CMA recognises that it needs to ensure that algorithms and other forms of artificial intelligence are not being used by companies as a “vehicle for collusion”. The CMA is also interested in how businesses use online data and the growth of algorithms for decision-making, including price discrimination.
Brexit: The CMA acknowledges that post-Brexit its workload will increase and embraces the opportunities that this presents.
The CMA does not intend to shy away from the increase in work resulting from the antitrust cases and merger investigations that currently fall under the jurisdiction of the European Commission. It wants to “step into a bigger role” on the international stage, in particular by growing co-operative relationships with other competition authorities across the world, including the European Commission, and strengthening its involvement in international bodies. The CMA will continue working with the UK government advising on policy choices, and on wider proposals for revisions of laws where they affect competition. In particular, it will seek to ensure clarity on allocation of existing and post-Brexit cases, including investigations, processes and remedies.
The proposed Annual Plan makes no reference to the CMA’s potential role in regulating state aid rules following the UK’s exit from the European Union. As such, there remains continued uncertainty as to which UK authority would take responsibility for enforcing state aid rules following Brexit, should this be required as part of the exit deal.
Regions: Further focus on regions and opening of a functioning office in Scotland.
The CMA is committed to building its regional presence as part of its “UK nations and regions” strategy. For example, the CMA will be opening a new office in Scotland, which will be staffed by 25 to 30 people, a considerable increase on its current representative office.
Remedies guidance: Upcoming consultation on remedies guidance.
The CMA will be consulting in 2018 on its review of its remedies guidance across phase one and phase two mergers.
The Covington Competition Blog will be tracking and reporting on these developments, and will publish a further update when the CMA’s Annual Plan is finalised.